INTRODUCTION
We made Germany our final stop — because we wanted to save the best for the last.

Germany is our country’s third-largest trading partner — and our strongest link to the European Union. But beyond trade, there is great admiration for Germany among us Filipinos — for your technology, your economic power, your strong national spirit — your individual enterprise enlightened by social values.

We recognize your concept of the “social market” which, like ours in the Philippines, emphasizes that public interest is much more than the sum of private interests.

We admire the kind of communitarian capitalism that Germany practices — where corporations have a perspective longer than the next quarter’s dividends; a greater feeling of responsibility to employees and customers; and a greater care for those social groups whom competition leaves behind.

This is why I regard the work of the German Development Agency as significant — because if it can “export” Germany’s concept of the “social market,” then it can help prevent the new world economic order from becoming brutally competitive and permanently damaging to the weaker countries.
PHILIPPINE ECONOMIC RECOVERY
As you may have heard, we Filipinos are on the road to restoring our economy to self-sustaining growth. And we are creating a business environment equally open to national and foreign investment.

We in the Philippines were left behind in East Asia’s growth because we mistakenly tried to protect our industries from foreign competition.

Now we realize we must join the global economy — and not shy away from it.

So we started by dismantling the barriers previously erected over the last generation and a half against foreign investment and multinational industry.

And we are breaking up cartels and monopolies — to start with, in telecommunications, shipping, banking, agri-business and insurance — to level the playing field of enterprise.

By the middle of next year, our average tariff rate will be reduced, from 28% to 20%. In ten years’ time, we intend to maintain a 5% rate. Already, tariff rates on capital goods are down to that level.
LIBERAL INVESTMENT RULES AND PROCEDURES
We are also liberalizing, and simplifying, investment rules and procedures. Foreign investors may now hold 100% of the equity in all but a very small list of exceptions. You may even lease land for as long as 75 years.

Foreign exchange is freely convertible, and remittances of profits or capital unrestricted. And our accession to MIGA — Multilateral Investment Guarantee Agency of the World Bank (WB) — covers your investments against all political and noncommercial risks.

We have just opened up our banking system, which was closed for 46 years. Deutsche bank is among the 26 that have asked to come in.

And we are privatizing dozens of government corporations and state assets — steel, liquefied petroleum gas, palm-oil plantations, and a fertilizer corporation.
EXPORT AND TRADE ZONES
For multinationals locating in our country, we have set up 40 industrial estates and export zones from Luzon to Mindanao in the south. The principal ones are the former American bases of Subic and Clark; and Calabarzon (the five provinces immediately south of Metro Manila).

Subic — once the largest American naval base overseas — is larger than the whole of Singapore. Its airport takes 747s; its deep-water anchorage takes 600 ships. It also has a huge ship-repair yard and 40,000 skilled workers.

The former Clark Air Base we are transforming into a world-class aviation center and a modern industrial estate — with nearly 24 thousand hectares for light-to-medium industry and agricultural-industrial development.

You may have heard about our electric power crisis of 1992-93. But you would not have to worry about it because that has been solved. We installed almost 1,000 megawatts of new capacity last year; and we are adding another 1,000 megawatts in the next 12 months.

Our B-O-T (build-operate-and-transfer) program has worked so well in the case of electric-power plants that we plan to replicate it in other infrastructure sectors such as highways, railroads, bridges and seaports.
AN ECONOMY ON THE MOVE
These first structural reforms are beginning to pay off. We expect GNP to grow by at least 5% — compared with last year’s 2.4%. This may be modest by East Asian standards, but our economy is definitely on the move — and its growth has strong underpinnings. Exports grew by 16% last year.

And over the first semester of 1994, investments grew by 330%, while approvals by our board of investments were four and a half times those of the same period last year.

Last year, we formally re-entered the world capital markets after 12 years out in the cold, with a series of Eurobonds that raised $1.0 billion.

Our stock exchange ranked third in the international finance corporation’s list of the 25 best developing-country exchanges for 1993 with a 155% performance.
GERMAN INVESTMENTS IN THE PHILIPPINES
German investments in the Philippines so far are very small. They made up no more than 3.15% of all foreign investments in the Philippines last year. But the big German companies that set up manufacturing bases many years ago are still there; some in fact have expanded capacity.

Our two-way trade last year added up to US$1.3 billion. It was unfavorable to us by US$113 million. One of our objects here is to balance this trade; and then to enlarge and diversify it. That is why we are so pleased that the German Development Agency — through Herr von Othegraven — was able to arrange this conference with such distinguished representatives of German banks and German industry.
COME AND SEE FOR YOURSELVES
I am so certain of the desirability of the Philippines as an investment site that all i really ask is for you to come and see for yourselves what we have to offer.

What you will find is a friendly, outgoing people whose culture you can be comfortable with. We are east Asia’s only Christian country.

Even more important, we share your political ideals. Our intellectuals of the nineteenth century were the children of the European Enlightenment movement. In fact, our national hero, Dr. Jose Rizal, published in berlin in 1887 his revolutionary novel, Noli Me Tangere — which sparked the Philippine Revolution of 1896-1898.

Not just the Philippines but the whole of east Asia offers tremendous commercial possibilities for German business. With integration thru the ASEAN Free-Trade Area (AFTA), our six countries of Brunei, Indonesia, Malaysia, Singapore, Thailand and the Philippines are going to become one market of 340 million consumers — whose incomes are rising at the world’s fastest rates.

On my initiative, ASEAN has just organized a growth area made up of Brunei, Malaysia’s Sabah and Sarawak, the famous Indonesian Spice Islands of Moluccas and Sulawesi and Kalimantan, and our own southern islands of Mindanao and Sulu.

Not just Southeast Asia but the whole of East Asia is forming into one great economic unit. The Philippines makes an excellent gateway to this great market — particularly since we also have a home-consumer base of 65,000,000 that understands and accepts European products and marketing styles.
IS THERE AN ECONOMIC FORTRESS EUROPE?
In closing, let me speak of a trend which is causing us some anxiety.

In recent years, German trade seems to be retreating into an economic “Fortress Europe”. Fully three-fourths of all your country’s trade is now within the European Community, Scandinavia, and Eastern Europe. Less than 10% is with the United States and less than 3% with Japan.

Global trade seems to be coalescing around regional markets. But I doubt whether this limiting trend will be good for humankind in the long run. Because — as we all know — trade is not just an impersonal exchange of goods.

It involves people — and it involves cultural exchange, personal friendships, and political collaboration. In fact, trade inspired and enriched civilization. We will certainly be all the poorer by any reduction of our trade contacts.

Finally, let me take this occasion to invite you to put together a delegation to visit our country — to view at firsthand how we Filipinos are developing and competing as a democracy in the Asia Pacific — and to enable us to return your splendid hospitality.

Salamat ng marami: many thanks; Mabuhay and auf weidersehen!